Enhancing Corporate Governance in High-Growth Entrepreneurial Firms

2014 ◽  
Vol 11 (06) ◽  
pp. 1450038 ◽  
Author(s):  
Mark J. Ahn
Keyword(s):  
Boards Of Directors ◽  
New Ventures ◽  
High Growth ◽  
Relational Model ◽  
Entrepreneurial Firms ◽  
External Resources ◽  
Sustainable Performance ◽  
Advisory Boards ◽  
Technological Complexity ◽  
Growth Firms

This study explores how new ventures access advice to achieve high growth and sustainable performance. A relational model of three important themes — compliance (regulatory and legal governance), contacts (networks of suppliers, customers, investors), and content (strategic insights) — emerged as critical to any sustainable high-growth effort. Our findings suggest that advisory boards and boards of directors have a significant role in managing and creating value for emerging high-growth firms due to inherently high failure rates, technological complexity, and market risk — all of which requires access to external resources.

Are CEOs and CFOs Rewarded for Disclosure Quality?

2014 ◽  
Vol 90 (3) ◽  
pp. 1013-1047 ◽  
Author(s):  
Kai Wai Hui ◽  
Steven R. Matsunaga
Keyword(s):  
Boards Of Directors ◽  
Forecast Accuracy ◽  
High Growth ◽  
Effective Communication ◽  
Disclosure Quality ◽  
Management Forecast ◽  
Growth Firms ◽  
Financial Disclosures ◽  
Cfo Compensation

ABSTRACT This study provides evidence regarding the importance that boards of directors place on effective communication with the investor community by examining whether CEO and CFO compensation are related to the quality of the firm's financial disclosures. Using an index derived from analyst forecast characteristics and management forecast accuracy to measure disclosure quality, we find changes in the annual bonus for both the CEO and CFO to be positively associated with changes in disclosure quality. We also find that the relation is stronger for high-growth firms, firms that have stronger governance structures, and for executives with lower equity incentives. Overall, our findings provide insight into the importance that boards place on effective communication with investors as a responsibility of the CEO and CFO and, therefore, provide them with contractual incentives to address the moral hazard problem associated with voluntary disclosures. JEL Classifications: M41.

What Determines Entrepreneurial Orientation of Polish Internationalized Firms?

2019 ◽  
pp. 43-65
Author(s):  
Krzysztof Wach
Keyword(s):  
Entrepreneurial Orientation ◽  
Random Sampling ◽  
Growth Dynamics ◽  
High Growth ◽  
High Tech ◽  
Stratified Random Sampling ◽  
Entrepreneurial Firms ◽  
Main Research ◽  
Innovative Firms ◽  
Growth Firms

This article focuses on entrepreneurial orientation during the internationalisation process of the firm, which is one of the main research streams within international entrepreneurship.The main goal of the article is to discuss and elaborate on the basics of international entrepreneurial orientation, its fundamentals and principles and to answer the question what determines entrepreneurial orientation of Polish internationalized firms. The paper presents the results of the survey based on stratified random sampling of 355 Polish internationalized firms. Applying t statistics, the following results were observed. Firms having foreign branches or subsidies abroad are more entrepreneurial. Firms based on the local business domain are more entrepreneurial. High-tech firms are more entrepreneurial. High-growth firms are more entrepreneurial than firms which note traditional growth dynamics. Hyper-growth firms are more entrepreneurial than other firms, also than highgrowth companies. Innovative firms are more entrepreneurial. Strategically-orientated firms are more entrepreneurial. Firms cooperating in any networks are more entrepreneurial.

scholarly journals Variety in founder experience and the performance of knowledge-intensive innovative firms

2020 ◽  
Author(s):  
Ethan Gifford ◽  
Guido Buenstorf ◽  
Daniel Ljungberg ◽  
Maureen McKelvey ◽  
Olof Zaring
Keyword(s):  
Cox Regression ◽  
High Growth ◽  
Entrepreneurial Firms ◽  
Industrial Transformation ◽  
Selection Processes ◽  
Different Types ◽  
Growth Firms ◽  
Stage Process ◽  
Knowledge Intensive ◽  
Innovation And Entrepreneurship

AbstractThis article contributes with an analysis of the specific linkages between knowledge, innovation and entrepreneurship for industrial dynamics, within the emerging literature upon knowledge-intensive innovative entrepreneurial (KIE) firms. We find a distinct variety in the usefulness of different types of founder experience (single or teams) in the performance of entrepreneurial firms. This variety affects selection in the economy, as measured by the performance of firms in a two-stage process – namely first by analyzing survival over time and then of high growth rates. We do so in order to consider averages/probabilities in the population using Cox regression as well as of the outliers, using quantile regression. We find that on one hand, founders having previously started firms or worked in the same industry are more likely to survive. On the other hand, very high-growth firms have founders who previously started firms or worked in universities. Combining different types of founder experience in KIE firms has a consistently positive relationship with performance both in terms of survival and of growth. Our interpretation is that the variety of founder experience affect selection processes and opportunity recognition in KIE firms and thereby fundamentally affect whether, and to what extent, entrepreneurial actions lead to industrial transformation.

Earnings Management, Litigation Risk, and Asymmetric Audit Fee Responses

2006 ◽  
Vol 25 (1) ◽  
pp. 85-98 ◽  
Author(s):  
Lawrence J. Abbott ◽  
Susan Parker ◽  
Gary F. Peters
Keyword(s):  
Earnings Management ◽  
High Growth ◽  
Audit Fees ◽  
Discretionary Accruals ◽  
Litigation Risk ◽  
Audit Fee ◽  
Growth Firms ◽  
Price Earnings Ratio ◽  
Year 2000 ◽  
Conservative Bias

This study examines the association between audit fees and earnings management, using publicly available fee data. We hypothesize that, due to asymmetric litigation effects, audit fees decrease (increase) with a client's risk of income-decreasing (increasing) earnings management risk. We also hypothesize that the positive relation between income-increasing earnings management risk and audit fees is heightened for clients that are high-growth firms. We test our hypotheses with a sample of 429 public, non-regulated, Big 5 audited companies, using fee data for the year 2000. We find that downward earnings management risk, as estimated by negative (i.e., income-decreasing) discretionary accruals, is associated with lower audit fees. We also document that upward earnings management risk, as estimated by positive discretionary accruals, is associated with higher audit fees and that the interaction of this risk with an industry-adjusted price-earnings ratio has an incrementally significant, positive effect on fees. We interpret our findings as consistent with a conservative bias on the part of auditors. The conservative bias arises from asymmetric litigation risk in which income-increasing discretionary accruals exhibit greater expected litigation costs than income-decreasing discretionary accruals (Simunic and Stein 1996; Palmrose and Scholz 2004; Palmrose et al. 2004; Richardson et al. 2002; Heninger 2001).

Explaining the Growth Potential of a Market Leader and Challenger: Evidence from Japan’s Telecommunications Services Industry

2021 ◽  
pp. 227853372198952
Author(s):  
Mostafa Saidur Rahim Khan ◽  
Naheed Rabbani
Keyword(s):  
High Growth ◽  
Growth Potential ◽  
Book Value ◽  
Good Investment ◽  
Growth Firms ◽  
Price Earnings Ratio ◽  
Equity Ratio ◽  
Market Leader ◽  
Services Industry ◽  
Telecommunications Services

This study examines the growth potential of the market leader and market challenger in Japan’s telecommunications services industry. We focus on Nippon Telegraph and Telephone Corporation (NTT) and KDDI, the market leader and challenger (respectively) in terms of sales revenue, total assets, and market share. Following finance literatures, we use higher values of price–earnings ratio (P/E) and market-to-book-value-of-equity ratio (MV/BV) as the indicators of growth potential. High growth firms have the potential to outperform the overall market over a significant period of time providing a good investment opportunity for retail and institutional investors. This study uses financial data of the NTT and KDDI from the period between 2001 and 2016 and applies several regression models to examine the growth potential of the market leader and market challenger in Japan’s telecommunications services industry. Using the P/E and MV/BV as indicators of growth potential, we show that the market challenger’s growth potential is significantly higher than that of the market leader, even after controlling for firm size, liquidity, profitability, leverage, cash flow, and age.

scholarly journals Myth-busting and entrepreneurship policy: the case of high growth firms

2017 ◽  
Vol 29 (5-6) ◽  
pp. 414-443 ◽  
Author(s):  
Ross Brown ◽  
Suzanne Mawson ◽  
Colin Mason
Keyword(s):  
High Growth ◽  
Entrepreneurship Policy ◽  
Growth Firms

Antecedents of growth-oriented entrepreneurship before and during the Greek economic crisis

2017 ◽  
Vol 24 (3) ◽  
pp. 528-544 ◽  
Author(s):  
Ioannis Giotopoulos ◽  
Alexandra Kontolaimou ◽  
Aggelos Tsakanikas
Keyword(s):  
Work Experience ◽  
Early Stage ◽  
New Ventures ◽  
High Growth ◽  
Content Type ◽  
Crisis Period ◽  
Individual Level ◽  
Level Data ◽  
The Social ◽  
Before And After

Purpose The purpose of this paper is to explore potential drivers of high-growth intentions of early-stage entrepreneurs in Greece before and after the onset of the financial crisis of 2008. Design/methodology/approach To this end, the authors use individual-level data retrieved from Global Entrepreneurship Monitor annual surveys (2003-2015). Findings The results show that high-growth intentions of Greek entrepreneurs are driven by different factors in the crisis compared to the non-crisis period. Male entrepreneurs and entrepreneurs with significant work experience seem to be more likely to be engaged in growth-oriented new ventures during the crisis period. The same appears to hold for entrepreneurs who are motivated by an opportunity and also perceive future business opportunities in adverse economic conditions. On the other hand, the educational level and the social contacts of founders with other entrepreneurs are found to drive ambitious Greek entrepreneurship in the years before the crisis, while they were insignificant after the crisis outbreak. Originality/value Based on the concept of ambitious entrepreneurship, this study contributes to the literature by investigating the determinants of entrepreneurial high-growth expectations in the Greek context emphasizing the crisis period in comparison to the pre-crisis years.

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